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In this paper we disentangle the impact of household financial constraints on mortgage rate from a number of dimensions of credit risk. This analysis relies on a dataset that contains information on the economic and financial decisions of Spanish households in four different years: 2002, 2005, 2008, and 2011. Our results suggest that banks’ profitable customers are able to bargain for lower mortgage rates. However, contrary to other studies, the risk profile does not have a significant effect on mortgage rates. Credit institutions tend to charge higher rates during the crisis to all customers, irrespective of their risk profiles.


  • Households, Mortgages, Financial constraints, Credit risk
Original languageEnglish
Pages (from-to)76-100
Number of pages25
JournalThe Journal of Real Estate Finance and Economics
Issue number1
Early online date19 Dec 2016
Publication statusPublished - Jan 2018

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